SECURITY EQUITY FUND
INSTITUTIONAL CLASS
DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 8th day of February 2008, between Security Equity
Fund, a Kansas corporation ("Company"), on behalf of Security Global
Institutional Fund, Security Mid Cap Value Institutional Fund and Security Small
Cap Value Fund (the "Funds"), and Security Distributors, Inc., a Kansas
corporation (the "Distributor").
WITNESSETH:
WHEREAS, the Company is engaged in business as an open-end, management
investment company registered under the federal Investment Company Act of 1940
(the "1940 Act");
WHEREAS, the Distributor is willing to act as principal underwriter for the
Company to offer for sale, sell and deliver after sale, the Institutional Shares
of each of the Funds (the "Institutional Class Shares") on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
set forth, the parties hereto agree as follows:
1. Employment of Distributor. The Company hereby employs the Distributor
to act as principal underwriter for the Company with respect to the
Funds' Institutional Class Shares and hereby agrees that during the
term of this Agreement, and any renewal or extension thereof, or until
any prior termination thereof, the Distributor shall have the exclusive
right to offer for sale and to distribute any and all of the
Institutional Class Shares issued or to be issued by the Company. The
Distributor hereby accepts such employment and agrees to act as the
distributor of the Institutional Class Shares issued or to be issued by
the Company during the period this Agreement is in effect and agrees
during such period to offer for sale such Institutional Class Shares as
long as such Institutional Class Shares remain available for sale by
the Funds, unless the Distributor is unable legally to make such offer
for sale as the result of any law or governmental regulation. The
rights granted to the Distributor shall be nonexclusive in that the
Company reserves the right to sell its shares to investors on the basis
of applications received and accepted by the Company or its agent or in
connection with the merger or consolidation of any of the Funds. It is
recognized by the Company that the Funds' investment adviser and/or its
affiliates may use or allocate their past profits and other resources
to the Distributor in order to cover expenses incurred in the
distribution of Institutional Class Shares of the Funds.
2. Offering Price. Prior to the issuance of any Institutional Class Shares
by the Funds pursuant to any subscription tendered by or through the
Distributor and confirmed for sale to or through the Distributor, the
Distributor shall pay or cause to be paid to the custodian of the
applicable Fund(s) in cash, an amount equal to the net asset value of
such Institutional Class Shares at the time of acceptance of each such
subscription and confirmation by the Company of the sale of such
Institutional Class Shares. All
Institutional Class Shares shall be sold to the public only at their
public offering price at the time of such sale, and the Funds shall
receive not less than the full net asset value thereof. The Company
reserves the right to suspend the sale and issuance of Institutional
Class Shares at any time.
3. Allocation of Expenses and Charges. While this Agreement is in effect,
the Funds shall pay all costs and expenses in connection with the
registration of their respective Institutional Class Shares under the
Securities Act of 1933 (the "1933 Act"), including all expenses in
connection with the preparation and printing of any registration
statement documents (including prospectuses and statements of
additional information) necessary for registration thereunder but
excluding any additional costs and expenses incurred in furnishing the
Distributor with prospectuses. The Funds will pay all costs and
expenses of printing and mailing prospectuses, statements of additional
information, reports and periodic statements to their respective
existing Institutional Class shareholders. The Funds also will pay all
costs, expenses and fees incurred in connection with the qualification
of their respective Institutional Class Shares under the applicable
Blue Sky laws of the states in which the Institutional Class Shares are
offered.
While this Agreement is in effect, the Distributor will pay or
reimburse the Funds for:
(a) All costs and expenses of printing and mailing
prospectuses to prospective Institutional Class
shareholders and confirmations, and all costs and expenses
of preparing, printing and mailing advertising material,
sales literature, circulars, applications, and other
materials used or to be used in connection with the
offering for sale and the sale of their respective
Institutional Class Shares; and
(b) All clerical and administrative costs in processing the
applications for and in connection with the distribution
of Institutional Class Shares.
The Distributor agrees to submit to the Company for its prior approval
all advertising material, sales literature, circulars and any other
material which the Distributor proposes to use in connection with the
offering for sale of Institutional Class Shares.
4. Redemption of Institutional Class Shares. The Distributor, as agent of
and for the account of the Funds, may redeem Institutional Class Shares
of the Funds offered for resale to it at the net asset value of such
Institutional Class Shares (determined as provided in the then-current
registration statement of the Funds). To the extent authorized under
applicable law, including the 1940 Act, whenever the officers of the
Company deem it advisable for the protection of the shareholders of the
Funds, they may suspend or cancel such authority.
5. Distributor May Act as Broker and Receive Commissions. Notwithstanding
any other provisions of this Agreement, it is understood and agreed
that the Distributor may act as a broker, on behalf of the Funds, in
the purchase and sale of securities provided that any such transactions
and any commission paid in connection therewith shall comply in every
respect with the requirements of the 1940 Act and in particular with
Section 17(e) of that
Act and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder. The Distributor will not, or cause
the Funds to direct remuneration from commissions by the Funds for
portfolio securities transactions to a broker or dealer for promoting
or selling shares of the Funds.
6. Agreements Subject to Applicable Law and Regulations. The parties
hereto agree that all provisions of this Agreement will be performed in
strict accordance with the requirements of: the 1940 Act, the 1933 Act,
the Securities Exchange Act of 1934, the rules and regulations of the
U.S. Securities and Exchange Commission under said statutes, applicable
state Blue Sky laws and the rules and regulations thereunder, the rules
of the Financial Industry Regulatory Authority and the Articles of
Incorporation and Bylaws of the Company.
7. Duration and Termination of Agreement. For each Fund to which it
applies, this Agreement shall become effective upon its execution, and
shall, unless terminated as provided herein, continue in force for two
years from that date, and from year to year thereafter, provided that
such continuance for each successive year is specifically approved
annually by either the Board of Directors or by the vote of a majority
of the outstanding voting securities of the Institutional Class shares
of the Funds and, in either event, by the vote of a majority of the
directors of the Company who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting upon such approval. As used in the
preceding sentence, the words "interested persons" shall have the
meaning set forth in Section 2(a)(19) of the 1940 Act.
This Agreement may be terminated at any time without the payment of any
penalty by the Company by giving the Distributor at least sixty (60)
days' previous written notice of such intention to terminate. This
Agreement may be terminated by the Distributor at any time by giving
the Company at least sixty (60) days' previous written notice of such
intention to terminate.
This Agreement shall terminate automatically in the event of its
assignment. As used in the preceding sentence, the word "assignment"
shall have the meaning set forth in Section 2(a)(4) of the 1940 Act.
8. Construction of Agreement. No provision of this Agreement is intended
to or shall be construed as protecting the Distributor against any
liability to the Company or the Funds or to the Funds' shareholders to
which the Distributor would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its
duties under this Agreement or reckless disregard of its duties
hereunder.
Terms or words used in the Agreement, which also occur in the Articles
of Incorporation or Bylaws of the Company, shall have the same meaning
herein as given to such terms or words in the Articles of Incorporation
or Bylaws of the Company.
9. Distributor an Independent Contractor. The Distributor shall be deemed
to be an independent contractor and, except as expressly provided or
authorized by the Company, shall have no authority to act for or
represent the Company.
10. Notice. Any notice required or permitted to be given hereunder to either
of the parties hereto shall be deemed to have been given if mailed by
certified mail in a postage-prepaid envelope addressed to the respective
party as follows, unless any such party has notified the other party
hereto that notices thereafter intended for such party shall be mailed to
some other address, in which event notices thereafter shall be addressed
to such party at the address designated in such request:
Security Equity Fund
One Security Benefit Place
Topeka, Kansas 66636-0001
Security Distributors, Inc.
One Security Benefit Place
Topeka, Kansas 66636-0001
11. Amendment of Agreement. No amendment to this Agreement shall be effective
until approved by (a) a majority of the Board of Directors of the Company
or a vote of the holders of a majority of the outstanding voting
securities of the Institutional Class shares of the Series, and (b) a
majority of the directors of the Company who are not parties to this
Agreement or interested persons of any such party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their respective corporate officers thereto duly authorized on the day, month
and year first above written.
SECURITY EQUITY FUND
BY: XXXXXX X. XXXXX
----------------------------
Xxxxxx X. Xxxxx, President
ATTEST:
XXX X. XXX
--------------------------------------
Xxx X. Xxx, Secretary
SECURITY DISTRIBUTORS, INC.
BY: XXXX X. XXXX
----------------------------
Xxxx X. Xxxx, President
ATTEST:
XXX X. XXX
--------------------------------------
Xxx X. Xxx, Secretary
SECURITY EQUITY FUND
AMENDMENT TO
INSTITUTIONAL CLASS DISTRIBUTION AGREEMENT
WHEREAS, Security Equity Fund (the "Company") and Security Distributors, Inc.
(the "Distributor") are parties to an Institutional Class Distribution Agreement
dated February 8, 2008 (the "Distribution Agreement"), under which the
Distributor has agreed to act as principal underwriter in connection with sales
of the shares of the Company's Institutional Class of common stock;
WHEREAS, on August 15, 2008, the Board of Directors of the Company authorized
the Company to offer its common stock of Alpha Opportunity Series in a new class
designated as the Institutional Class, and approved an amendment to the
Institutional Class Distribution Agreement between the Company and the
Distributor to include the sale of the Institutional Class of shares of the
Alpha Opportunity Series.
NOW, THEREFORE, IT IS BY THE PARTIES HERETO AGREED that the Distribution
Agreement is hereby amended to include the Institutional Class of shares of the
Alpha Opportunity Series effective August 15, 2008.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the
Distribution Agreement this 18th day of August, 2008.
SECURITY EQUITY FUND
By:
----------------------------
Xxxxxxx X. Xxxxxxx
ATTEST:
By:
----------------------------
Xxx X. Xxx
SECURITY DISTRIBUTORS, INC.
By:
----------------------------
Xxxx X. Xxxx
ATTEST:
By:
----------------------------
Xxx X. Xxx
